While the quasi-apocalyptic tumult over carbon pricing has dominated the Australian media for the best part of 2011, another fierce, albeit less high profile, environmental debate has entered its final stages – the labelling of palm oil on product packaging.

A long-running legislative saga, launched in the Australian senate in 2009 by independent Nick Xenophon, is being willed to the finish line by environmentalists Down Under.

An unlikely alliance between Xenophon, the Greens and the centre-right Coalition has passed legislation in the senate, despite it being rejected at committee stage. The truth in labelling – palm oil bill, which will require products to carry information on palm oil content, is now expected to be approved by the house of representatives.

But for conservation groups, the legislation is a long-overdue boost for the orangutan, which has been pushed to the edge of extinction by the rampant clearing of its natural habitat in Indonesia and Malaysia for palm oil cultivation.

Palm oil, which is also found in toothpaste and cosmetics, is labelled as vegetable oil on packaging in Australian shops.

A 2007 report by the UN found that 98% of natural rainforest in Malaysia and Indonesia could disappear by 2022, with palm oil production seen as a key driver of the destruction that sees the equivalent of 300 football pitches of forest wiped out each hour.

The impact upon the orangutan, the only Asian great ape, has been severe – it's estimated that 1,000 a year die due to forest clearing in its heartlands of Borneo and Sumatra, with predictions that the species could be extinct in the wild within 20 years.

There are also concerns over the impact of palm oil-driven deforestation on climate change, with peat-filled soils, exposed by the removal of trees, releasing large quantities of methane into the atmosphere.

Indonesia has been ranked the world's third largest emitter of carbon dioxide, behind the US and China, when deforestation is taken into account. But it is images of orphaned orangutans that has turned the issue into a cause celebre in Australia, which imports around 130,000 tonnes of palm oil a year.

The Don't Palm Us Off campaign, which has been supported by Zoos Victoria, TV network Ten and an assortment of local celebrities, has proved a straightforward environmental cause for Australians confused by the endless carbon price ructions.

"The production of palm oil is essentially destroying the habitat and homes of orangutan species," says Rachel Lowry, director of wildlife conservation at Zoos Victoria. "We have horrifying footage, images coming through to us almost daily here at Zoos Victoria."

"We have staff that go across to Indonesia for skill share programs that are bringing back reports of orangutans being displaced, being killed, essentially returning to burning fields or fields that have been cleared [to put] palm oil crops in."

The World Wildlife Fund and Greenpeace also support Xenophon's bill, arguing that Australia must move to certified sources of palm oil, as defined by the Roundtable on Sustainable Palm Oil.

However, opposition to the palm oil labelling requirements has been persistent. The Australian Food and Grocery Council, despite being a member of RSPO, claims that the changes will cost the industry "hundreds of millions of dollars" to implement and may even breach the Australia/New Zealand Food Treaty, which requires the antipodean neighbours to consult each other over amendments to food law. New Zealand is the world's largest user of palm kernel extract, a palm oil byproduct, which it uses to feed cows.

While the minority Gillard government should be able to brush aside the concerns of industry lobbyists, the situation with Malaysia is a little more delicate. Tan Sri Bernard Giluk Dompok, Malaysia's commodities minister, is currently in Australia to stress to MPs the economic importance of palm oil exports. Dompok insists that palm oil has been an "easy target" for campaigners in Australia, rebuffing evidence that the product causes environmental destruction.